Dublin City Council plans 2% cut in rates

DUBLIN CITY Council plans to cut rates for businesses in the city by 2 per cent next year in the face of a 12 per cent drop in Government funding.

The 2010 budget of the State’s largest local authority will be put to a vote of city councillors next Monday. Councillors will be faced with cuts to most of the city’s services, but will be asked to ratify the decrease in rates – one of the council’s biggest sources of funding.

The council was severely criticised by business groups last year for increasing rates by 3.3 per cent to offset a 7 per cent cut in the Local Government Fund.

This year the fund provided by the Government has been cut by a further 12 per cent, yet the council intends to bring rates, which fund approximately one-third of the entire budget for running the city, to 1.3 per cent, their lowest level in years.

While the cuts in the salaries of council workers will go some way to offset the drop in rates, the council is still likely to face significant problems in maintaining its services next year. However, Labour councillor Kevin Humphreys said it was essential that city businesses were supported.

“This is a very hard time for businesses and the cut in rates is the council’s recognition of that. It is vitally important that we try to maintain businesses and maximise the retention of jobs in the city.”

The reduction in rates is likely to result in a corresponding reduction in funding for the Business Improvement District scheme, the business-funded company established to provide additional services to the city such as graffiti removal and street cleaning.

Each business pays an annual fee equivalent to just under 5 per cent of its rates bill and it is unlikely that cash-strapped businesses will be willing to increase the percentage paid.

A draft of the council’s budget will be published later this week. Councillors can vote to amend the budget but cannot pass any amendments that would result in a net reduction in funding for the city.